Legal Question in Business Law in California

Can a business be operated as a co-tenancy? I thought tenancy in common was a way to hold title to property, not a form of business organization.

In particular, us five siblings inherited a vineyard (about 30 acres) in the Lodi area. There are also a couple small houses on the property that are being rented out. We are all more or less active in managing the vineyard and the rentals, but now after ten years some disputes are arising that will probably make it difficult or impossible to make decisions like price for the grapes and upkeep of the rentals. There was a patchwork of contracts and verbal agreements to divide up responsibilities, but these have either expired or been revoked.

If one of us has to take some legal action, how do we know what body of law applies? Ordinary real estate cotenancy law doesn't seem to offer any guidance for managing a business that just happens to use the co-owned property. Are we a partnership? If not, why not? Maybe an unincorporated association? If we are only a cotenancy, what are dissenters rights?


Asked on 9/15/11, 9:29 pm

1 Answer from Attorneys

Co-tenancy is a broad term for all forms of ownership of real property by more than one person. It includes joint tenancy, tenancy in common, community property, and maybe a few others I can't think of off the top of my head. It is NOT, however, a form of business entity. You may have formed a de facto partnership, but it would take a great deal more information than you have provided, or even could provide in this format, to figure that out. Even if you have a legal partnership, however, the law doesn't give you much in the way of guidance in managing the partnership. All the law really says is "majority rules subject to a fiduciary duty not to benefit the majority at the expense of the minority." It provides no protection of the minority from legitimate business decisions of the majority no matter how misguided, as long as they are not made for the purpose of harming the minority. The only real legal remedies for dissenters, whether in partnership or as co-tenants, is to terminate the arrangement. That would require an accounting and dissolution action as to any partnership, and a partition action to force a sale of the real property, both of which would be done in a single combined case in your situation.

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Answered on 9/15/11, 11:06 pm


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